Stormwater Utility Fee: City of Saint Peter

Untreated stormwater entering a storm drain.

In the face of changing regulatory environment related to stormwater management (e.g., Phase II Small MS4 General Permit requirements), many municipalities have implemented stormwater utility fees to help meet permit requirements, fund needed improvements, and support ongoing utility maintenance and repair. The City of Saint Peter implemented a stormwater utility fee in 2004. Prior to the development of Saint Peter as an MS4 (Municipal Separate Storm Sewer System) community, stormwater responsibilities were integrated into the wastewater utility and was being funded by the wastewater utility. Realizing the need to independently support the stormwater utility, City managers proposed adoption of a stormwater utility fee. The fee is intended to support all aspects of the utility including improvements for aging infrastructure and funding future stormwater projects.

The City of Saint Peter utilized a model ordinance developed by the League of Minnesota Cities as a template for developing ordinance language and developing a rate structure (i.e., stormwater utility fees). Coordinating with their municipal engineering firm Bolton and Menk, the City of Saint Peter produced a rate structure that would assign individual properties a rate proportional to their stormwater contribution. To develop a rate structure, the City tracked staff time, maintenance and repairs cost, and improvements needed for approximately two years and worked with Bolton and Menk for an additional six months to come up with a fee that would support the new utility. Ultimately, fees were assigned to individual properties based on a Residential Equivalency Factor (REF), where residential properties receive a value of 1.0, properties which contribute more stormwater runoff than typical residential properties receive a high REF value (e.g., industrial properties: 1.5 REF) and properties with lower stormwater runoff contributions receive lower values (e.g., manufactured housing park: 0.5 REF). As of 2020, the stormwater utility fee for a typical residential household is $7.50 per month. Using the stormwater utility fee to incentivize stormwater management on individual properties, the City offers a utility fee rebate program for implementation of rain barrels (i.e., rainwater harvesting) on site.

A major challenge faced by Saint Peter in implementing a stormwater utility fee program was educating its City Council as to why a separate stormwater utility fee was needed, separate from the existing wastewater utility fee, as well as public acceptance of the fee. Ensuring that implemented stormwater utility fees were reasonable while still being enough to support the utility and demonstrating that fees were related to actual stormwater contributions by property type were important steps in receiving buy-in from the City Council and public acceptance.

After years of implementation, the City has learned many lessons related to implementation and structure of their stormwater utility fee program. The City recognizes that REF methodology which assigns higher fees to properties which typically have higher impervious area ratios may not be appropriate if facilities are implementing modern stormwater runoff control best management practices (BMPs). Funding stormwater utility capital improvement projects related to new development can be a challenge due to city ordinances and a variety of sources used to seek funding for these projects, ranging from tax increment financing (TIF) to assessments. It is also challenging to account for both funding sources when assessing individual homes in a new development.

More information regarding the City of Saint Peter’s stormwater utility fee can be found on their municipal website, or by contacting Pete Moulton, Public Works Director with the City of Saint Peter (petem@saintpetermn.gov).

Project Location: City of Saint Peter
Completion Date: 2004 to Present (Ongoing)
Organizations Involved: City of Saint Peter, Bolton and Menk, and League of Minnesota Cities
Project Budget Summary: Cost of implementing program: approximately $50,000
Quantitative Outcomes: The City of Saint Peter’s stormwater utility fee is collected and used to supplement the City’s annual stormwater utility budget of $0.8 million. Stormwater utility fees are utilized to meet state mandates for monitoring and implementing permit requirements, as well as funding capital improvements projects and routing repair and maintenance.